Garment owner will start worker retrenchment from June due to drying up orders, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Rubana Huq said Thursday.

She also estimates that the country’s apparel sector might experience an irrecoverable loss of $5 billion in the outgoing 2019-20 fiscal year due to the pandemic-induced slump.

Rubana Huq said these while inaugurating country’s first ‘state of the art Covid-19 lab’ for workers during a virtual press conference on Thursday.

The BGMEA president also said: “It is a harsh reality that we have nothing to do but to let go of workers from June 1 as factories are running under fifty five percent of their capacity. We are in discussion with the government on how to tackle this crisis.”

“The Covid-19 pandemic has caused less buying of apparel goods by the consumers. Therefore, the sector will see business losses worth $5 billion, which could not be recovered,” Rubana said at a virtual press briefing on Thursday.

Global apparel buyers have canceled work orders worth $3.15 billion so far due to the pandemic, while the imported unused raw materials were piled up at factories, said Rubana.

“As factories are running with lesser work orders, it will not be possible to engage all the workers. RMG owners may retrench workers from this month,” she added.

She also mentioned how retailers pledged to take 26% of the cancelled work orders, but failed to clear the terms and conditions.

On the contrary, they had been demanding discounts and delaying payments against shipped goods, said Rubana, also the managing director of Mohammadi Group.

“However, there is a hope that the United States has cut 52% work orders from China. If we can survive the pandemic, Bangladesh will be a good sourcing destination for apparel goods,” she claimed.

To make the RMG industry and its supply chain sustainable after the pandemic, the BGMEA president urged manufacturers for shifting their marketing to virtual marketplaces, as online business was growing daily.